You shouldn't be reading Android code, it looks like you have some really basic concepts to learn first... SimonForsman and I explained that in that line you mention the only thing that's being copied is the address in memory of the PongTimeView object. Nothing more is copied, there's only one instance of PongTimeView in the whole program and in that line the activity is asking android for the address of that instance so it can access it later.
The constructor of PongTimeView isn't called directly in the code, Android creates that object when it creates the layout of the PongTime activity. The line "setContentView(R.layout.main);" (line 78 of PongTime) triggers a function that at some point creates an instance of PongTimeView and that's where the constructor is called. Android handles that... as I said before, there are files missing in that project. The layout is defined by the programmer in a .layout file. That layout has an ID and that ID is "main". Inside the layout there's only one element, a PongTimeView component that extends SurfaceView (a valid component type for android's layouts) and the ID of that component is "pongview".
One of the many thing Android does automatically is creating a class called "R" that has all the id's you define in your code, so R.layout.main is the id of the layout, and R.id.pongview is the id of the PongTimeView object. setContentView searchs for the layout file that describes the "main" layout and creats the layout object, and that creation also creates the components inside that layout. The next line, findViewByID searchs the layout components until it finds the one with id "pongview" and returns the address.
Android does a lot of things automatically that make it harder for you to understand what's happening, search for a Pong or other simple game that's not for Android and that doesn't use a big framework. Look for a game done only with Java and Swing and it should be easier to understand, but it will be hard too if you don't know basic concepts. And also, look for a tutorial, it's a lot easier to understand everything when the code is explained step by step... the 2do page in a quick google search pointed me to this one: http://staticvoidgames.com/tutorials/swing/SwingPong.jsp
I recommend you put that PongTime code aside for a while and go see some more didactic code where you can see concepts clearly. Once you are confortable reading code that only uses standard Java stuff then you can start learning about how Android handle stuff (again, with more didactic examples) and after that you'll fully understand what's happening in that game. The missing files from that project and not knowing about Android programming are not helping you, you're wasting time trying to understand too much new stuffs at the same time.